August 28, 2016

Me, You and the Rise of Cryptocurrencies

A defining feature of a cryptocurrency is [that] it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation

Investopedia

The toy and play industries are among the most international of businesses with goods and money moving from Europe and the US to points in Asia. Currently, the use of national currencies makes financial transactions between the participants slow, expensive and open to governmental scrutiny.

That is where cryptocurrencies come in. You are probably familiar with but have not yet used Bitcoin. Bitcoin involves no central banks and allows parties to make and receive payments securely, privately, instantly and at no cost (for the first one million dollars and 1% after). Bitcoin has had some missteps dues to possible larceny on the part of one of the creators but the concept has proven to be a boon to many companies.

There are other cryptocurrencies. BlackCoin and Dash, to name two. Now we learn that 4 big banks: UBS, BNY Mellon, Deutsche Bank and Banco Santander, are creating their own cryptocurrency: The U.S.C. (“Utility Settlement Coin”). The motive is to save banks time and cost and conceivably pass those savings on to their customers. It is unclear from my research if they will be able to provide the privacy that cryptocurrencies like Bitcoin do.

Technology has disrupted the book, music and communication industries. It is now doing the same thing to paying our bills. I think its time we all learn more and become more comfortable with these kinds of transactions as they are more than likely going to become the new status quo in moving money around the world.

By the way, is it time for some inventor to create the Bitcoin game? It could be the new Monopoly.